GLOBAL MARKETS-Shares, dollar, Treasuries dip as Fed minutes awaited
* Focus on Fed's June meeting minutes, Bernanke to speak
* Investors seek better notion of when Fed will scale back stimulus
* U.S. oil surges, gains on Brent as crude inventory shrinks
NEW YORK, July 10 (Reuters) - U.S. equity markets and government debt prices edged lower on Wednesday as investors awaited minutes from the Federal Reserve's June policy meeting for clues to when it will begin to slow its bond-buying stimulus program and by how much. Weak data from China and a ratings downgrade of Italy curbed investors' enthusiasm for equities pending the release of minutes from the Fed's June 18-19 meeting. After a five-day run of gains for world shares and the dollar's surge to a three-year high, investors were seen booking profits and squaring positions. Many equity markets were trading slightly lower, though U.S. stocks initially rose on the notion that either the minutes or Fed Chairman Ben Bernanke - due to speak after the close of regular Wall Street trading - might suggest that the Fed may not begin to scale back its stimulus measures in September, as a market consensus has indicated. The minutes from the policy-setting Federal Open Market Committee meeting will be released at 2 p.m. EDT (1800 GMT). Bernanke will speak at 4:10 p.m. EDT. "All eyes are really on that Fed meeting and the minutes that come out," said Anthony Conroy, head trader for ConvergEx in New York. "People are trying to figure out exactly when, how big and how quickly, so that's bringing a little bit of nervousness." MSCI's world equity index was up 0.22 percent, helped by a late rally in Chinese shares sparked by talk of a policy easing to offset slowing growth.
In early afternoon trading, the Dow Jones industrial average dropped 18.33 points, or 0.12 percent, to 15,282.01. The Standard & Poor's 500 Index dropped 1.62 points, or 0.10 percent, to 1,650.70. The Nasdaq Composite Index gained 6.94 points, or 0.20 percent, to 3,511.21. The broad FTSEurofirst 300 index of leading regional European companies had initially gained but soon buckled as data showing China's exports fell for the first time in 17 months was followed by soft manufacturing figures from France, the Netherlands and Greece. The index ended 0.09 percent higher at 1,190.02. China warned of a "grim" outlook for trade after data showed exports fell 3.1 percent in June, confounding forecasts for a rise of 4 percent. However, the data fueled talk that China's central bank may ease policy in an effort to boost growth.
The euro's gains against the dollar accelerated early in New York trade to touch a session high after the release of some limp U.S. data. U.S. wholesale inventories fell in May by their most in over a year and a half, the second straight monthly decline for the reading and a sign that restocking by businesses could weigh on growth in the second quarter. The euro rose as high as $1.2861 and was last trading at 1.2849, up 0.54 percent on the day. The benchmark 10-year U.S. Treasury note was down 7/32 in price to yield 2.6664 percent. German Bund futures reversed gains, tracking weakness in U.S. Treasuries before a $21 billion auction of U.S. 10-year notes and the Fed minutes. Bund futures fell as low as 142.41, 15 ticks lower on the day, having traded as high as 142.87 earlier. Bunds were last five ticks lower at 142.51. Oil rose on both sides of the Atlantic, with the U.S. benchmark climbing to a 14-month high above $105 a barrel, buoyed by a sharp decline in fuel stockpiles in the United States, the world's top consumer of oil. But worries about a sluggish Chinese economy, underlined by the bleak June trade data, kept a lid on gains. U.S. crude rose $2.20 to $105.73 a barrel, while Brent gained 50 cents to trade at $108.31.